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Security of Supply

The context of today’s debate must be global warming—the most important single problem that this country faces. It is an international problem. Our contribution to its solution will not alone solve the whole problem, but as a nation state we have a duty to set a lead. We must punch above our weight, and we must play our full part as a country in international efforts to find a solution. It therefore logically follows that there should be no solution to the question of security of energy supply that exacerbates the problem of global warming. Indeed, the solutions that we find must bear down on that problem. As the Secretary of State made clear in his introductory remarks, the energy issues that face our country are not immediate, but they are marching remorselessly towards us and the lead times for any solution are, of necessity, long. The key features of the issue are well understood—the declining output of existing nuclear stations and the reduction in output from coal-fired power stations by about half over the next 15 years. Thus, there is a need to replace existing capacity and to meet future and, we would all accept, rising demand. The implication of all that is increased reliance on the international energy market. Other countries are in that position—I do not accept that it is unreasonable—but we must understand that, if we take the same approach, we will compete with those countries against a background of clear and steadily rising demand. We must face up to the fact that the international energy market is not the free market that we would like it to be. Indeed, even in the European Union, the energy market is not the free market that we would like it to be. I commend the Secretary of State’s efforts to liberalise that market, but we are not there yet. We must also recognise that there is an increasing tendency for national Governments in exporting countries to intervene in industry issues for reasons that are unrelated to the gas or oil market. In other words, they view their possession of a desirable resource as an extension of foreign policy, as well as something to sell to people who want to buy. We must take that into account when we consider our own nation state’s security of supply. A modern, post-industrial economy is inter-reliant and fundamentally reliant on electricity. Issues such as the just-in-time delivery of foodstuffs and other goods, the running of the transport network, modern communications and modern information technology all rely on electricity. I suppose that that is stating the obvious, but that does not make it any the less important. The Secretary of State was straightforward enough to say that price rises, which cynics might say could be a conservation measure, seem inevitable. Again, we must accept that, if price rises come, they will impact on the elderly, the vulnerable and our industrial competitiveness. How should we respond? I do not believe that conservation and considering new methods of generation are rival policies. I strongly agree with the Secretary of State’s point on the importance of diversity of supply and we should continue the good work being done on home insulation and driving up energy efficiency standards in building regulations, for example. Much has been done, but much remains to be done. There are good ideas in the industry. I wish to draw the Government’s attention to a recent project in which Siemens, located in Heaton in my constituency, and Alcan, which runs an aluminium smelter on the Northumbrian coast, secured significant energy efficiencies simply by refurbishing the turbines in an existing power plant. I commend that approach to the Government and the House. The North sea is a mature oil and gas field, but it still has reserves and we should encourage the use of new technologies to maximise the extraction potential and get the maximum benefit from it. Now is not the time to engage in a technical debate on the working of the North sea tax regime, but there is a strong case for the Government and the industry to work in partnership on ensuring that we maximise the gain from the North sea fields. Significant losses occur in electricity transmission between generators and end users, but developments in conduits have the potential to reduce that loss and to increase efficiency. We should take an interest in those developments, and if new investment is required, so be it. In addition, if our aim is to reduce the losses that occur during transmission between generator and consumer, it is logical to locate power plants closer to consumers of power. There is a north-south divide in this country, with generating capacity located predominantly in the north and demand—certainly increasing demand—tending to be in the south. There would be consequential issues arising from such a policy, but if we are serious about reducing inefficiencies in electricity supply, we have to face up to that divide. I urge the Government to do that. There are potential contributions from other sources: wind farms and other renewables have been mentioned and I think a case can be made for reconsideration of hydroelectric schemes, but I urge Ministers to give particular consideration to carbon sinks and clean coal technology. Output from convention coal-fired power stations will decline; if it is possible—economically possible—to invest in clean-coal technology and new methods of carbon capture, we should do so. Having said all that—